U.S. healthcare spending twice as high other high-income nations

By

Allen Cone

Salaries of physicians and nurses, pharmaceuticals, medical devices and administration are fueling the high costs in the United States, according to a study at Harvard. File Photo by Tyler Olson/Shutterstock

March 13 (UPI) -- Americans are spending nearly twice as much on healthcare as 10 other high-income countries because of the high costs of services, according to a new study at Harvard.

Salaries of physicians and nurses, pharmaceuticals, medical devices and facility administration are fueling high costs for care in the United States, according to a study at the Harvard T.H. Chan School of Public Health, the Harvard Global Health Institute and the London School of Economics. The findings were published Tuesday in the Journal of the American Medical Association.

"We know that the U.S. is an outlier in health care costs, spending twice as much as peer nations to deliver care," senior author Ashish Jha, professor of Global Health at Harvard Chan School and director of the Harvard Global Health Institute said in a press release. "This gap and the challenges it poses for American consumers, policymakers, and business leaders was a major impetus for health care reform in the U.S., including delivery reforms implemented as part of the Affordable Care Act."

Researchers compared U.S. data from 2013 to 2016 to healthcare data from Britain Canada, Germany, Australia, Japan, Sweden, France, Denmark, the Netherlands and Switzerland during the same time period, identifying 100 metrics linked to healthcare spending.

In 2016, the United States spent 17.8 percent of its gross domestic product on healthcare. Among other countries, Switzerland was closest to the United States at 12.4 percent and Australia was farthest at 9.6 percent.

The researchers found that Americans average $9,403 per person in annual healthcare spending. In comparison, Germans spend $5,182 and the Dutch spend $5,202, while the mean spending for all 11 countries is $5,419.

Despite spending more money, U.S. life expectancy was the lowest at 78.8 years -- compared with a range of 80.7 to 83.9 years for the other countries. And the U.S. participation rate with health insurance was 90 percent, while other nations ranged from 99 to 100 percent coverage.

Administrative care accounted for 8 percent of total costs in the United States, compared to just 1 percent to 3 percent in other nations.

Pharmaceuticals per capita spending was $1,443 in the United States, compared to a range of $466 to $939 in other nations. Brand-name pharmaceuticals were especially more expensive in the United States.

"As the U.S. continues to struggle with high healthcare spending, it is critical that we make progress on curtailing these costs. International comparisons are very valuable -- they allow for reflection on national performance and serve to promote accountability," said Irene Papanicolas, a visiting assistant professor in the Department of Health Policy and Management at Harvard Chan School.

The findings debunked some commonly held beliefs -- that the United State has higher rates of physician services and days spent in the hospital, more specialists and more spending on social services.

The study found only 19 percent of the total spending in the United States is on inpatient services, which is among the lowest of the studied countries. The United States has the best outcomes for people with heart attacks or strokes, but falls below average for avoidable hospitalizations for patients with diabetes and asthma.

"In addition, the reasons for these substantially higher costs have been misunderstood: These data suggest that many of the policy efforts in the U.S. have not been truly evidence-based," Jha said.

In an accompanying editorial in JAMA, Dr. Ezekiel J. Emanuel, chairman of the department of Medical Ethics and Health Policy at the Perelman School of Medicine at the University of Pennsylvania, noted high-price-high-volume procedures, administrative costs, excessive medical imaging and pharmaceutical spending represent about two-thirds of the overall per-capita spending gap.

"If we in the United States could lower the prices and per-capita volumes of our CT scans, MRIs, and just the top 25 high-volume-high-price surgical procedures to those of the Netherlands, for example, we would see savings of about $425 per capita, or a total of $137 billion," Emanuel wrote in the editorial.